An Analysis of Economic Growth Indices in Nigeria Using the Solow’s Model

This article presents an Analysis of Economic Growth Indices in Nigeria using the Solow’s Model. The model uses key indices of economic growth such as Capital formation, Labor Supply and Total factor productivity to estimate the real Gross Domestic Product (GDP) per capita of the Nigerian economy. Nigeria's economic growth has fluctuated in recent decades, with periods of rapid expansion followed by stagnation. The study utilizes the Augmented Cobb-Douglas production function to model Nigeria's economic growth from 2005 to 2022. The research used MATLAB and Excel spreadsheet to simulate growth using 2005 as base year and to compare the results obtained with World Bank data. The results of the study showed that the model was able to track the trends in Nigeria’s Labor Force data and Total Factor Productivity with a relatively stable growth rate of approximately 2.63% per year. But the model tends to overestimate observed Capital Formation, with an average annual growth rate of 14.49%. The Solow’s model showed a growth pattern of Nigeria with an average growth rate of 4.53%, and an estimated real Gross Domestic Product (GDP) per capita of $20,190.50 in 2022, indicating the model’s ability to predict the economic growth rate of Nigeria. Nigeria policymakers should adopt strategies that improves these key drivers of economic growth in order to boost the overall production of the country.